1. Any penalties imposed by current bank? Unsually, when there is a refinancing, the home owner has to redeemed or paydown fully his existing loan. The existing bank would impose a penalty if the home loan is still within the penalty period. This is normally around 2-3 years for Singapore mortgage loans. If it is, you may wish to calculate the cost savings of refinancing against the cost of the penalty. If the positive benefits are small, it may not be worth the while then to refinance at this point in time.



2. Check new terms and conditions the terms and conditions of the new bank that will be providing you with the refinanced loan: - check out the penalty for full redemption - penalty for partial prepayment - any lock in feature - legal subsidy - any clawback period for legal subsidy - anu other conditions

3. Fixed vs Variable housing loan interest rates Ascertain if the interest rates are fixed or variable. Typically, variable rate packages do not require a lock-in i.e. the homeowner can 'walk out' of the loan and move it to another bank without the full redemption penalty (normally around 1.5%)

4. Lower global interest rates are good for refinancing It is important to have an idea of where global interest rates are at this point in time and which direction they would be heading. Typically, global interest rates will rise in a growing economy in order to slowdown the effects of inflation arising from an overheating economy. Rising rates would add more costs to your financing. For now, we are still enjoying fairly low rates comparatively. With the slowdown in global economies, academically speaking, rates are not expected to shoot up aggressively. This is good for houseowers and borrowers in general.